Ugandan manufacturers push for return to Rwandan market

People cross the Gatuna/Katuna border crossing between Uganda and Rwanda after its reopening on January 31, 2022. PHOTO | AFP

By JONATHAN KAMOGA

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Ugandan exporters and manufacturers are still struggling to return to the Rwandan market, three months after Kigali reopened its common border with Kampala after

nearly three years of closure.

The persistent trade bottlenecks are a blot on the recent public relations efforts by Lt-Gen Muhoozi Kainerugaba, the Commander of Uganda’s Land Forces, whose shuttle diplomacy was followed by the announcement of the reopening of the common borders in February.

The reopening was taken as a sign of a new chapter in the relations between Uganda and Rwanda, as both countries promised to tackle contentious issues through dialogue.

The open border was expected to return bilateral trade between the two countries, especially in sectors such as food and agriculture, mining, iron and steel-related industries.

But three months later, trade between the two neighbours is yet to return to its previous volumes. Exporters are reporting an increase in several tariff and non-tariff barriers since the border opened, and manufacturers are grappling with re-establishing supply chains in Kigali.

Uganda’s Junior Minister for Trade Harriet Ntabaazi told The EastAfrican that the two countries are currently engaged in high-level talks to iron out some of the barriers. They include quotas and quality concerns from Kigali. The minister did not give details or provide timelines.

Daniel Birungi, the executive director of the Uganda Manufacturers Association said several manufacturers were already engaging their counterparts in Kigali.

“Since the announcement of the border opening, there have been preliminary discussions about resuming operations in a market where we have not been in a long time. These have been mainly between Ugandan manufacturers and their distributors in Rwanda pushing for the resumption of trade,” Mr Birungi said.

Coming from a pandemic that forced them to scale down on production, some Ugandan manufacturers who had products on the Rwandan market are still operating at low capacity.

However, small-scale traders living near the common border have already resumed business to Rwanda, according to Uganda’s Ministry of Trade and Industry.

Uganda’s exports to Rwanda hit a low of $2 million in 2020 at the peak of hostilities between the two countries, from a high of more than $200 million before the closure of the border.

Ugandan manufacturers took more business into South Sudan and explored further alternative markets like the Democratic Republic of Congo.

Resumption

Hima Cement Uganda, one of the top cement exporters to Rwanda said, “We are currently not yet exporting to Rwanda but we are resuming soon. We have however already sent a verification team to Rwanda, which will help inform our decision,” said Caroline Kezaabu, the company’s communication manager.

Cement was one of Uganda’s top exports to Rwanda before the common border was closed. Other commodities are aluminium, maize, soap, electricity, pharmaceutical products and fuel.

According to Martin Kyeyune, the corporate affairs manager at Roofings Uganda Ltd, a steel manufacturer, the opening of the border allows the company to return to its former market.

“Our intention comes from our vision to access markets in Africa wherever there is an opportunity. Whereas we are not yet immediately seeing business currently from Rwanda, the prospects are there now that the border is open,” he said.

Tour operators in Uganda are also dusting safari vans at the news of the opening of the border for passenger traffic.

The two countries, which share the world’s population of mountain gorillas together with DRC, have seen tourists cross the border to either country, chauffeured by operators working within the region.

According to the country’s 2018 tourism report that came out nearly a year before the border was closed, Rwanda contributed about 26 percent of the total tourist arrivals to Uganda, just after Kenya at 29 percent.

According to the Association of Uganda Tour Operators, the reopening of the border has excited their members, most of whom are just recovering from the devastating effects of the coronavirus pandemic.

“The reopening of the Rwanda border means a big deal. So many tour operators doing out bound trips could not go to Rwanda and that meant shorter itineraries, fewer clients and less income,” Nancy Okwong, the association’s spokesperson said.